IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v106y2026ics1544612326008172.html

Banking access and crypto participation: Evidence from India’s crypto ban

Author

Listed:
  • Flynn, Matthew J.
  • Kumar, Ishitha
  • Menon, Anish Shankar

Abstract

Can governments curb retail cryptocurrency participation by restricting access to regulated banking rails, and what spillovers follow in the formal financial system? We study India’s 2018 “banking ban” on virtual currencies and its 2020 reversal by the Supreme Court. Using a difference-in-differences design complemented by event-study evidence, we combine country-time measures of retail crypto participation with indicators of formal financial participation and payment activity. We document three findings. First, restricting banking access produces a large, immediate contraction in retail crypto activity. Second, the reversal does not generate an equal-and-opposite rebound; recovery is gradual rather than immediate. Third, the restriction is associated with spillovers into the formal financial system, including higher bank-account ownership, household deposit accounts, and some payment-system measures. These results identify banking access as a key transmission channel for retail crypto participation and show that debanking policies can have persistent effects and broader financial spillovers even when later reversed.

Suggested Citation

  • Flynn, Matthew J. & Kumar, Ishitha & Menon, Anish Shankar, 2026. "Banking access and crypto participation: Evidence from India’s crypto ban," Finance Research Letters, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finlet:v:106:y:2026:i:c:s1544612326008172
    DOI: 10.1016/j.frl.2026.110289
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612326008172
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2026.110289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:106:y:2026:i:c:s1544612326008172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.